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Investment Securities
 9 Months Ended
Sep. 30, 2025
Investments, Debt and Equity Securities [Abstract]  
Investment Securities Investment Securities
 
Our investment securities portfolio consists of obligations of state and political subdivisions, U.S. federal government agencies, such as the Government National Mortgage Association ("GNMA") and Small Business Administration ("SBA"), and U.S. government-sponsored enterprises ("GSEs"), such as the Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage Corporation ("FHLMC"), Federal Farm Credit Banks Funding Corporation and FHLB, and U.S. and foreign corporations. We also invest in residential and commercial mortgage-backed securities (“MBS”/"CMBS") and collateralized mortgage obligations (“CMOs”) issued or guaranteed by the GSEs, as reflected in the following table.

A summary of the amortized cost, fair value and allowance for credit losses related to securities held-to-maturity as of September 30, 2025 and December 31, 2024 is presented below.
Held-to-maturity:
Amortized Cost 1
Allowance for Credit LossesNet Carrying AmountGross UnrealizedFair Value
(in thousands)Gains(Losses)
September 30, 2025
Securities of U.S. government-sponsored enterprises:
   CMBS issued by FHLMC, FNMA and GNMA$237,757 $— $237,757 $— $(26,472)$211,285 
CMOs issued by FHLMC, FNMA and GNMA194,734 — 194,734 91 (12,490)182,335 
MBS pass-through securities issued by FHLMC, FNMA and GNMA180,148 — 180,148 — (23,771)156,377 
SBA-backed securities1,252 — 1,252 — (28)1,224 
Debentures of government-sponsored agencies121,656 — 121,656 — (17,028)104,628 
Obligations of state and political subdivisions61,204 — 61,204 12 (6,973)54,243 
Corporate bonds15,000 — 15,000 — (285)14,715 
Total held-to-maturity$811,751 $— $811,751 $103 $(87,047)$724,807 
December 31, 2024
Securities of U.S. government-sponsored enterprises:
  CMBS issued by FHLMC, FNMA and GNMA$242,559 $— $242,559 $— $(34,449)$208,110 
  CMOs issued by FHLMC, FNMA and GNMA209,748 — 209,748 — (18,492)191,256 
MBS pass-through securities issued by FHLMC, FNMA and GNMA192,388 — 192,388 — (30,942)161,446 
  SBA-backed securities1,513 — 1,513 — (61)1,452 
Debentures of government-sponsored agencies141,431 — 141,431 — (22,694)118,737 
Obligations of state and political subdivisions61,560 — 61,560 — (8,341)53,219 
Corporate bonds30,000 — 30,000 — (685)29,315 
Total held-to-maturity$879,199 $— $879,199 $— $(115,664)$763,535 
1 Amortized cost and fair values exclude accrued interest receivable of $2.2 million and $3.4 million at September 30, 2025 and December 31, 2024, respectively, which is included in interest receivable and other assets in the consolidated statements of condition.

Management measures expected credit losses on held-to-maturity securities collectively by major security type with each type sharing similar risk characteristics and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. With regard to MBS, CMBS and CMOs issued or guaranteed by the GSEs, and SBA-backed securities, we expect to receive all the contractual principal and interest on these securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Accordingly, no allowance for credit losses has been recorded for these securities. With regard to securities issued by states and political subdivisions and corporate bonds, management considers: (i) issuer and/or guarantor credit ratings, (ii) historical probability of default and loss given default rates for given bond ratings and remaining maturity, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, (iv) internal credit review of the financial information, and (v) whether or not such securities have credit enhancements such as guarantees, contain a defeasance clause, or are pre-refunded by the issuers. Based on the comprehensive analysis, no credit losses are expected.

The following table summarizes the amortized cost of our portfolio of held-to-maturity securities issued by states and political subdivisions and corporate bonds by Moody's and/or Standard & Poor's bond ratings as of September 30, 2025 and December 31, 2024.
Obligations of state and political subdivisionsCorporate bonds
(in thousands)September 30, 2025December 31, 2024September 30, 2025December 31, 2024
Aaa / AAA$38,388 $42,161 $— $— 
Aa1 / AA+22,816 19,399 — — 
A2 / A— — 15,000 30,000 
Total$61,204 $61,560 $15,000 $30,000 

A summary of the amortized cost, fair value and allowance for credit losses related to securities available-for-sale as of September 30, 2025 and December 31, 2024 is presented below.
Available-for-sale:
Amortized Cost 1
Gross UnrealizedAllowance for Credit LossesFair Value
(in thousands)Gains(Losses)
September 30, 2025
Securities of U.S. government-sponsored enterprises:
   CMBS issued by FHLMC, FNMA and GNMA$246,548 $790 $(635)$— $246,703 
CMOs issued by FHLMC, FNMA and GNMA162,809 543 (1,214)— 162,138 
MBS pass-through securities issued by FHLMC, FNMA and GNMA108,182 340 (2,440)— 106,082 
Obligations of state and political subdivisions33,772 — (5,090)— 28,682 
Total available-for-sale$551,311 $1,673 $(9,379)$— $543,605 
December 31, 2024
Securities of U.S. government-sponsored enterprises:
   CMBS issued by FHLMC, FNMA and GNMA$222,862 $154 $(4,977)$— 218,039 
   CMOs issued by FHLMC, FNMA and GNMA42,432 28 (6,321)— 36,139 
MBS pass-through securities issued by FHLMC, FNMA and GNMA30,498 2 (4,840)$— 25,660 
SBA-backed securities331 — (23)— 308 
Debentures of government- sponsored agencies8,971 — (1,761)— 7,210 
U.S. Treasury securities12,020 — (1,205)10,815 
Obligations of state and political subdivisions96,178 — (12,464)— 83,714 
Corporate bonds6,000 — (351)— 5,649 
Total available-for-sale$419,292 $184 $(31,942)$— $387,534 
1 Amortized cost and fair value exclude accrued interest receivable of $1.8 million and $1.7 million at September 30, 2025 and December 31, 2024, respectively, which is included in interest receivable and other assets in the consolidated statements of condition.

The amortized cost and fair value of investment debt securities by contractual maturity at September 30, 2025 and December 31, 2024 are shown below. Expected maturities may differ from contractual maturities if the issuers of the securities have the right to call or prepay obligations with or without call or prepayment penalties.
 September 30, 2025December 31, 2024
 Held-to-MaturityAvailable-for-SaleHeld-to-MaturityAvailable-for-Sale
(in thousands)Amortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair Value
Within one year$12,952 $12,853 $40,067 $40,026 $36,476 $36,380 $99,431 $99,258 
After one but within five years127,497 120,616 119,088 119,537 118,590 110,857 106,986 103,058 
After five years through ten years217,568 190,411 119,044 119,034 229,040 191,328 75,429 67,940 
After ten years453,734 400,927 273,112 265,008 495,093 424,970 137,446 117,278 
Total$811,751 $724,807 $551,311 $543,605 $879,199 $763,535 $419,292 $387,534 

Sales of investment securities and gross gains and losses are shown in the following table:
 Three months endedNine months ended
(in thousands)September 30, 2025September 30, 2024September 30, 2025September 30, 2024
Available-for-sale:
Sales proceeds$— $— $167,017 $292,621 
Gross realized losses— — (18,736)(32,541)
The reported values of pledged investment securities are shown in the following table.
(in thousands)September 30, 2025December 31, 2024
Pledged to the State of California:
Secure public deposits in compliance with the Local Agency Security Program$319,454 $288,385 
Collateral for trust deposits1,200 1,284 
   Collateral for Wealth Management and Trust Services checking account1,500 895 
Total investment securities pledged to the State of California322,154 290,564 
Bankruptcy trustee deposits pledged with Federal Reserve Bank2,138 651 
Pledged to FHLB Securities-Backed Credit Program269,768 284,148 
Pledged to the Federal Reserve Discount Window319,109 365,759 
Total pledged investment securities$913,169 $941,122 
There were 172 and 269 securities in unrealized loss positions at September 30, 2025 and December 31, 2024, respectively. Those securities are summarized and classified according to the duration of the loss period in the tables below:
September 30, 2025< 12 continuous months≥ 12 continuous monthsTotal securities
 in a loss position
(in thousands)Fair valueUnrealized lossFair valueUnrealized lossFair valueUnrealized loss
Held-to-maturity:
CMBS issued by FHLMC, FNMA and GNMA$— $— $211,285 $(26,472)$211,285 $(26,472)
CMOs issued by FHLMC, FNMA and GNMA— — 172,617 (12,490)172,617 (12,490)
MBS pass-through securities issued by FHLMC, FNMA and GNMA— — 156,094 (23,771)156,094 (23,771)
SBA-backed securities— — 1,224 (28)1,224 (28)
Debentures of government-sponsored agencies— — 104,628 (17,028)104,628 (17,028)
Obligations of state and political subdivisions— — 51,206 (6,973)51,206 (6,973)
Corporate bonds— — 14,715 (285)14,715 (285)
Total held-to-maturity— — 711,769 (87,047)711,769 (87,047)
Available-for-sale:
CMBS issued by FHLMC, FNMA and GNMA$94,823 $(165)$27,965 $(470)$122,788 $(635)
CMOs issued by FHLMC, FNMA and GNMA54,133 (645)3,273 (569)57,406 (1,214)
MBS pass-through securities issued by FHLMC, FNMA and GNMA47,098 (175)11,936 (2,265)59,034 (2,440)
Obligations of state and political subdivisions247 (3)28,434 (5,087)28,682 (5,090)
Total available-for-sale196,301 (988)71,608 (8,391)267,910 (9,379)
Total securities at loss position$196,301 $(988)$783,377 $(95,438)$979,679 $(96,426)
December 31, 2024< 12 continuous months≥ 12 continuous monthsTotal securities
 in a loss position
(in thousands)Fair valueUnrealized lossFair valueUnrealized lossFair valueUnrealized loss
Held-to-maturity:
CMBS issued by FHLMC, FNMA and GNMA$— $— $208,110 $(34,449)$208,110 $(34,449)
CMOs issued by FHLMC, FNMA and GNMA18,451 (1,623)172,805 (16,869)191,256 (18,492)
MBS pass-through securities issued by FHLMC, FNMA and GNMA3,487 (150)157,959 (30,792)161,446 (30,942)
SBA-backed securities— — 1,452 (61)1,452 (61)
Debentures of government- sponsored agencies— — 118,737 (22,694)118,737 (22,694)
Obligations of state and political subdivisions5,558 (44)47,661 (8,297)53,219 (8,341)
Corporate Bonds— — 29,315 (685)29,315 (685)
Total held-to-maturity27,496 (1,817)736,039 (113,847)763,535 (115,664)
Available-for-sale:
CMBS issued by FHLMC, FNMA and GNMA$129,402 $(343)$58,065 $(4,634)$187,467 $(4,977)
CMOs issued by FHLMC, FNMA and GNMA— — 33,749 (6,321)33,749 (6,321)
MBS pass-through securities issued by FHLMC, FNMA and GNMA7 — 25,495 (4,840)25,502 (4,840)
SBA-backed securities— — 309 (23)309 (23)
Debentures of government- sponsored agencies— — 7,210 (1,761)7,210 (1,761)
U.S. Treasury securities— — 10,815 (1,205)10,815 (1,205)
Obligations of state and political subdivisions— — 83,714 (12,464)83,714 (12,464)
Corporate Bonds— — 5,649 (351)5,649 (351)
Total available-for-sale129,409 (343)225,006 (31,599)354,415 (31,942)
Total securities at loss position$156,905 $(2,160)$961,045 $(145,446)$1,117,950 $(147,606)

As of September 30, 2025, the investment portfolio included 145 investment securities that had been in a continuous loss position for twelve months or more and 27 investment securities that had been in a loss position for less than twelve months.

Securities issued by government-sponsored agencies, such as FNMA and FHLMC, usually have implicit credit support from the U.S. federal government. However, since 2008, FNMA and FHLMC have been under government conservatorship and, therefore, contractual cash flows for these investments carry explicit guarantees by the U.S. federal government while FNMA and FHLMC remain under conservatorship. Securities issued by the SBA and GNMA have explicit credit guarantees by the U.S. federal government, which protects us from credit losses on the contractual cash flows of the securities.
Our investments in obligations of state and political subdivision bonds are deemed creditworthy after our comprehensive analysis of the issuers' latest financial information, credit ratings by major credit agencies, and/or credit enhancements.
No allowances for credit losses have been recognized on available-for-sale securities in an unrealized loss position, as management does not believe any of the securities are impaired due to credit risk factors at either September 30, 2025 or December 31, 2024. In addition, for any available-for-sale securities in an unrealized loss position at September 30, 2025 and December 31, 2024, the Bank assessed whether it intended to sell the securities, or if it was more likely than not that it would be required to sell the securities before recovery of its amortized cost basis, which would require a write-down to fair value through net income. Because the Bank did not intend to sell those securities that were in an unrealized loss position, and it was not more-likely-than-not that the Bank would be required to sell the securities before recovery of their amortized cost bases, the Bank determined that no write-down was necessary as of the reporting date.

On July 7, 2023, the Bank entered into various interest rate swap agreements with notional values totaling $101.8 million to hedge balance sheet interest rate sensitivity and protect selected securities in its available-for-sale
portfolio against changes in fair value related to changes in the benchmark interest rate. In the fourth quarter of 2024, the Bank terminated these contracts resulting in an immaterial loss to be amortized over the life of the hedged securities. In the second quarter of 2025, a total of $69.1 million of par value of these securities were sold. For additional details, refer to Note 9, Derivative Financial Instruments and Hedging Activities.

Non-Marketable Securities Included in Other Assets

FHLB Capital Stock

As a member of the FHLB, we are required to maintain a minimum investment in FHLB capital stock as determined by the Board of Directors of the FHLB. The minimum investment requirements can increase in the event we increase our total asset size or borrowings with the FHLB. Shares cannot be purchased or sold except between the FHLB and its members at the $100 per share par value. We held $16.7 million of FHLB stock included in other assets on the consolidated statements of condition at both September 30, 2025 and December 31, 2024. The carrying amounts of these investments are reasonable estimates of fair value because the securities are restricted to member banks, and they do not have a readily determinable market value. Based on our analysis of FHLB's financial condition and certain qualitative factors, we determined that the FHLB stock was not impaired at September 30, 2025 and December 31, 2024. On October 23, 2025, FHLB announced a cash dividend for the third quarter of 2025 at an annualized dividend rate of 8.75% to be distributed in mid-November 2025. Cash dividends paid on FHLB capital stock are recorded as non-interest income.